Nadeem Paracha in The Dawn
In March 1991, a few days after the US forces invaded Iraq for the first time, 90 per cent of Americans who were polled approved of President George H. Bush’s ‘job performance’. Bush’s approval ratings skyrocketed and political commentators predicted that the Republican Party would be able to retain the presidency in the 1992 election.
Republican presidents Ronald Reagan and then Bush had held the White House since 1981. And in 1991, it seemed Bush, too, would be able to win a second term just as his predecessor Reagan had.
However, by the end of 1991, Bush’s approval ratings began to plummet, surprising many political pundits. This is when the strategy team of Bush’s opponent Bill Clinton (Democratic Party) came up with the slogan, “It’s the economy, stupid.”
Clinton was able to break the winning streak of the Republican Party by attacking the Bush administration’s economic performance, knowing fully well that the struggling economy had begun to impact many Republican voters as well.
According to the famous German philosopher and political theorist Karl Marx, a person’s “political consciousness” is almost always shaped by his economic circumstances.
Let me demonstrate this through the example of an acquaintance of mine, Tahir, or rather, through the story of his dad, Baqir. I’ve known Tahir since school. His family became extremely conservative in the 1980s, but it wasn’t always so.
Tariq’s father had migrated to Pakistan from India in 1947. He was 16 at the time. In Karachi, Tahir’s paternal grandfather was a small trader who set up a shop in Karachi in 1949. Tahir’s father often visited the shop after school.
Tahir once told me that their “class status suddenly jumped from lower-middle to upper-middle” in the early 1950s, when his grandfather managed to export merchandise to the US forces stationed in Korea.
Between 1950 and 1953, the Pakistani economy witnessed a boom of sorts due to such exports to the US during armed conflict between the US military and China-backed North Korean armies.
Tahir’s father, Baqir, took over the family business in the mid-1950s and began to expand it. Tahir told me that his father led a “highly Westernised life” and befriended many industrialists, bureaucrats and politicians. Baqir fully supported Ayub Khan’s 1958 coup because he believed that political instability had begun to negatively impact his family’s economic fortunes.
And Baqir did greatly benefit from the Ayub regime’s ‘pro-business’ policies. In 1960, he married a bureaucrat’s daughter. It was a love marriage. Apart from expanding his export business, Baqir spread his economic interests by buying two cinemas in Karachi and one in Lahore. He also bought a restaurant and opened two bars in Karachi’s Saddar and Tariq Road areas.
He also built a new palatial family home in Karachi.
According to political economist Akbar Zaidi, the country’s annual growth rate during the Ayub regime (1958-69) was an impressive 6.7 per cent in GDP. But Zaidi also mentions that Ayub’s policies in this context also created economic disparities which were exploited by opposition parties, such as Z.A. Bhutto’s PPP.
Baqir was a card-carrying member of Ayub’s centrist and modernist Conventional Muslim League. In December 1971, the PPP came to power on a ‘socialist’ platform. There was an increase in Pakistan’s import bills due to the 1973 world oil price shock, a serious post-1973 global recession during 1974-77, failure of cotton crops in 1974-75, pest attacks on crops and massive floods in 1973, 1974 and 1976-77. Pakistan experienced the worst inflation during 1972-77, when prices increased by 15 per cent.
As his business nosedived, Baqir sold his cinemas and bars in 1973, and in 1975 he wrapped up his export business and moved the family to London where he opened two Pakistani restaurants. However, he returned to Karachi after the fall of the Bhutto regime in 1977. By 1980, he was able to resurrect his business in Karachi when the Gen Zia dictatorship initiated denationalisation, deregulation and privatisation policies.
Pakistan achieved a national savings/GDP ratio of 16 per cent in 1986-87 amidst massive inflows of worker remittances from the Middle East. Unprecedented financial aid from the US and Saudi Arabia (for the anti-Soviet insurgency in Afghanistan) also helped.
Baqir was successful in regenerating his export business and also became an importer after Zia lifted curbs on imports. This was the period of Zia’s ‘Islamisation’ and Baqir followed suit by shunning his ‘Westernised ways’. He became a ‘born-again Muslim’. His palatial house in Karachi also went through a transformation. Expensive paintings gave way to equally expensive calligraphy of sacred verses and water- colour paintings of Islam’s sacred sites.
He built a mosque in the area where the house stood and also one in his vast office.
He remained a Zia supporter even after the latter’s demise in 1988. He voted for Nawaz Sharif’s (then ‘Ziaist’ and pro-business) PML-N until his business once again began to go south due to international sanctions imposed on Pakistan after the country tested two nuclear devices in 1998.
In the early 2000s, Baqir handed over the reigns of the family business to Tahir. Tahir supported the Musharraf dictatorship for a while but, despite the 8.5 per cent growth rate achieved by the regime till 2005, Tahir could not revive the family business.
Out of frustration, he sold it off and joined a multinational organisation as an employee. The frustration was also vented out through supporting the anti-Musharraf movement in 2007. The economy had begun to spiral down and this also meant Tahir’s wish to revive the family business was thwarted.
He got married and moved to Qatar and then Saudi Arabia. This is when I reconnected with him through Facebook. He supported Imran Khan in 2013 and, just before the 2018 elections, he was posting statuses about the upcoming ‘Islamic welfare state’ and Riyasat-i-Madina on Facebook.
However, only recently, as the country’s economy is once again threatening to spiral down, his Facebook posts have become critical of Khan’s regime. So I inboxed him: “Tahir, it seems there is no place for you to restart the family business in Riyasat-i-Madina.”
He didn’t reply.
Sunday, 26 May 2019
Friday, 24 May 2019
It can be Hard to tell Luck from Judgment
Randomness often explains the difference between triumph and failure writes Tim Harford in The FT
It hasn’t been a great couple of years for Neil Woodford — and it has been just as miserable for the people who have entrusted money to his investment funds. Mr Woodford was probably the most celebrated stockpicker in the UK, but recently his funds have been languishing. Piling on the woes, Morningstar, a rating agency, downgraded his flagship fund this week. What has happened to the darling of the investment community?
Mr Woodford isn’t the only star to fade. Fund manager Anthony Bolton is an obvious parallel. He enjoyed almost three decades of superb performance, retired, then returned to blemish his record with a few miserable years investing in China.
The story of triumph followed by disappointment is not limited to investment. Think of Arsène Wenger, for a few years the most brilliant manager in football, and then an eternal runner-up. Or all the bands who have struggled with “difficult second-album syndrome”.
There is even a legend that athletes who appear on the cover of Sports Illustrated are doomed to suffer the “SI jinx”. The rise to the top is followed by the fall from grace.
There are three broad explanations for these tragic career arcs. Our instinct is to blame the individual. We assume that Mr Woodford lost his touch and that Mr Wenger stopped learning. That is possible. Successful people can become overconfident, or isolated from feedback, or lazy.
But an alternative possibility is that the world changed. Mr Wenger’s emphasis on diet, data and the global transfer market was once unusual, but when his rivals noticed and began to follow suit, his edge disappeared. In the investment world — and indeed, the business world more broadly — good ideas don’t work forever because the competition catches on.
The third explanation is the least satisfying: that luck was at play. This seems implausible at first glance. Could luck alone have brought Mr Wenger three Premier League titles? Or that Mr Bolton was simply lucky for 28 years? Do we really live in such an impossibly random universe?
Perhaps we do. Michael Blastland’s recent book, The Hidden Half, argues that much of the variation we see in the world around us is essentially mysterious. Mr Blastland’s opening example is the marmorkrebs, a kind of crayfish that reproduces parthenogenetically — that is, marmorkrebs lay eggs without mating and those eggs develop into clones of their mothers.
Place two clones into two identical fish tanks and feed them identical food. These genetically identical creatures raised in apparently identical environments produce genetically identical offspring who nevertheless vary dramatically in their size, form, lifespan, fecundity, and behaviour. Sometimes things turn out very differently for no reason that we can discern. We might as well call that reason “luck” as anything else.
This is not to say that skill doesn’t matter — merely that in a competition in which all the leaders are highly skilled, randomness may explain the difference between triumph and failure. Good luck plus skill beats bad luck plus skill any time.
It is easy to underestimate how much chance is at play all around us. The psychologist Daniel Kahneman has recently been studying what he calls “noise”: the variability of judgments for no obvious reason.
A wine expert blind-tasting two glasses from the same bottle will often rate them differently. Pathologists disagree with each other in their judgments of the same biopsy. More disconcertingly, they also disagree with their own prior judgments of the case.
We rarely appreciate just how much inconsistency there is in the judgments we and others make, argues Prof Kahneman. It can hardly be a surprise, then, if past performance is no guarantee of future success.
We should remember, too, that people often achieve outsized success by taking risks or being contrarian. When John Kay examined the forecasting record of economists in the 1990s, he noted that Patrick Minford, an idiosyncratic forecaster, would often produce the best forecast one year and the worst forecast the next. If the consensus is wrong, being an outlier gives you a high chance both of dramatic success and spectacular failure.
We perceive all this randomness through a particular filter, too. Few people make the cover of Sports Illustrated after a run of mediocre luck. They appear after things have been going well, and if the good luck fails to hold then it seems like the SI jinx. More likely it is “regression to the mean”, or in simple terms, a return to business as usual.
We begin paying attention only when someone is producing a remarkable performance. Genius followed by mediocrity is a story arc we all notice. Mediocrity followed by genius just looks like genius — assuming the mediocre performer gets a second chance. Not all do.
So I wish Mr Woodford well. Perhaps he has lost his touch, perhaps the world has changed, or perhaps he has simply been unlucky. It would be nice to know which, but in such matters the world does not always satisfy our curiosity.
It hasn’t been a great couple of years for Neil Woodford — and it has been just as miserable for the people who have entrusted money to his investment funds. Mr Woodford was probably the most celebrated stockpicker in the UK, but recently his funds have been languishing. Piling on the woes, Morningstar, a rating agency, downgraded his flagship fund this week. What has happened to the darling of the investment community?
Mr Woodford isn’t the only star to fade. Fund manager Anthony Bolton is an obvious parallel. He enjoyed almost three decades of superb performance, retired, then returned to blemish his record with a few miserable years investing in China.
The story of triumph followed by disappointment is not limited to investment. Think of Arsène Wenger, for a few years the most brilliant manager in football, and then an eternal runner-up. Or all the bands who have struggled with “difficult second-album syndrome”.
There is even a legend that athletes who appear on the cover of Sports Illustrated are doomed to suffer the “SI jinx”. The rise to the top is followed by the fall from grace.
There are three broad explanations for these tragic career arcs. Our instinct is to blame the individual. We assume that Mr Woodford lost his touch and that Mr Wenger stopped learning. That is possible. Successful people can become overconfident, or isolated from feedback, or lazy.
But an alternative possibility is that the world changed. Mr Wenger’s emphasis on diet, data and the global transfer market was once unusual, but when his rivals noticed and began to follow suit, his edge disappeared. In the investment world — and indeed, the business world more broadly — good ideas don’t work forever because the competition catches on.
The third explanation is the least satisfying: that luck was at play. This seems implausible at first glance. Could luck alone have brought Mr Wenger three Premier League titles? Or that Mr Bolton was simply lucky for 28 years? Do we really live in such an impossibly random universe?
Perhaps we do. Michael Blastland’s recent book, The Hidden Half, argues that much of the variation we see in the world around us is essentially mysterious. Mr Blastland’s opening example is the marmorkrebs, a kind of crayfish that reproduces parthenogenetically — that is, marmorkrebs lay eggs without mating and those eggs develop into clones of their mothers.
Place two clones into two identical fish tanks and feed them identical food. These genetically identical creatures raised in apparently identical environments produce genetically identical offspring who nevertheless vary dramatically in their size, form, lifespan, fecundity, and behaviour. Sometimes things turn out very differently for no reason that we can discern. We might as well call that reason “luck” as anything else.
This is not to say that skill doesn’t matter — merely that in a competition in which all the leaders are highly skilled, randomness may explain the difference between triumph and failure. Good luck plus skill beats bad luck plus skill any time.
It is easy to underestimate how much chance is at play all around us. The psychologist Daniel Kahneman has recently been studying what he calls “noise”: the variability of judgments for no obvious reason.
A wine expert blind-tasting two glasses from the same bottle will often rate them differently. Pathologists disagree with each other in their judgments of the same biopsy. More disconcertingly, they also disagree with their own prior judgments of the case.
We rarely appreciate just how much inconsistency there is in the judgments we and others make, argues Prof Kahneman. It can hardly be a surprise, then, if past performance is no guarantee of future success.
We should remember, too, that people often achieve outsized success by taking risks or being contrarian. When John Kay examined the forecasting record of economists in the 1990s, he noted that Patrick Minford, an idiosyncratic forecaster, would often produce the best forecast one year and the worst forecast the next. If the consensus is wrong, being an outlier gives you a high chance both of dramatic success and spectacular failure.
We perceive all this randomness through a particular filter, too. Few people make the cover of Sports Illustrated after a run of mediocre luck. They appear after things have been going well, and if the good luck fails to hold then it seems like the SI jinx. More likely it is “regression to the mean”, or in simple terms, a return to business as usual.
We begin paying attention only when someone is producing a remarkable performance. Genius followed by mediocrity is a story arc we all notice. Mediocrity followed by genius just looks like genius — assuming the mediocre performer gets a second chance. Not all do.
So I wish Mr Woodford well. Perhaps he has lost his touch, perhaps the world has changed, or perhaps he has simply been unlucky. It would be nice to know which, but in such matters the world does not always satisfy our curiosity.
Wednesday, 22 May 2019
UN report compares Tory welfare policies to creation of workhouses
Robert Booth in The Guardian
The New York-based lawyer’s findings, published on Wednesday, follows a two-week fact-finding mission in November after which he angered ministers by calling child poverty in Britain “not just a disgrace but a social calamity and an economic disaster”. Now he has accused them of refusing to debate the issues he raised and instead deploying “window dressing to minimise political fallout” by insisting the country is enjoying record lows in absolute poverty, children in workless households and low unemployment.
The “endlessly repeated” mantra about rising employment overlooks that “close to 40% of children are predicted to be living in poverty two years from now, 16% of people over 65 live in relative poverty and millions of those who are in work are dependent upon various forms of charity to cope”, he said.
Amber Rudd, the work and pensions secretary, said in November she was “disappointed to say the least by the extraordinary political nature” of Alston’s language after his tour of places including Newcastle, Glasgow, Belfast, Cardiff, Jaywick and London. Alston replied in his 21-page final report that there was an “almost complete disconnect” between what ministers and the public saw. The impact of austerity was obvious to anyone who opened their eyes, he said.
In his most barbed swipe at Rudd and her predecessors in charge of welfare, he said: “It might seem to some observers that the department of work and pensions has been tasked with designing a digital and sanitised version of the 19th-century workhouse, made infamous by Charles Dickens.”
He said he had met people who had sold sex for money and joined gangs to avoid destitution.
The government hit back calling Alston’s report “barely believable”.
“The UN’s own data shows the UK is one of the happiest places in the world to live, and other countries have come here to find out more about how we support people to improve their lives,” a spokesperson for the Department for Work and Pensions said.
“Therefore this is a barely believable documentation of Britain, based on a tiny period of time spent here. It paints a completely inaccurate picture of our approach to tackling poverty.”
Alston will present his report to the UN Human Rights Council in Geneva next month and will argue that successive Conservative-led governments persisted with austerity and welfare cuts amid high levels of employment and a growing economy despite evidence that large-scale poverty was persisting. In doing so, “much of the glue that has held British society together since the second world war has been deliberately removed and replaced with a harsh and uncaring ethos ... British compassion has been replaced by a punitive, mean-spirited and often callous approach apparently designed to impose a rigid order on the lives of those least capable of coping.”
The report slams the government’s austerity programme, with criticisms of “shocking” rises in the use of food banks and rough sleeping, falling life expectancy for some, the “decimation” of legal aid, the denial of benefits to the severely disabled, falling teachers’ salaries in real terms and the impoverishment of single mothers and people with mental illness.
Alston said austerity had “deliberately gutted” local authorities, shrinking library, youth, police and park services to the extent that it was not surprising there were “unheard-of levels of loneliness and isolation”.
There was some praise for ministers for increases in work allowances under the universal credit welfare system and supporting the national minimum wage, but Alston said these measures had had not stopped the “dramatic decline in the fortunes of the least well-off”.
He recommended ministers reverse local government funding cuts, scrap the benefits cap, eliminate the five-week delay in receiving initial universal credit benefits and rethink the privatisation of services including rural transport.
“Thomas Hobbes observed long ago, such an approach condemns the least well-off to lives that are ‘solitary, poor, nasty, brutish, and short’,” he said. “As the British social contract slowly evaporates, Hobbes’ prediction risks becoming the new reality.”
A leading United Nations poverty expert has compared Conservative welfare policies to the creation of 19th-century workhouses and warned that unless austerity is ended, the UK’s poorest people face lives that are “solitary, poor, nasty, brutish, and short”.
In his final report on the impact of austerity on human rights in the UK, Philip Alston, the UN rapporteur on extreme poverty, accused ministers of being in a state of denial about the impact of policies, including the rollout of universal credit, since 2010. He accused them of the “systematic immiseration of a significant part of the British population” and warned that worse could be yet to come for the most vulnerable, who face “a major adverse impact” if Brexit proceeds. He said leaving the EU was “a tragic distraction from the social and economic policies shaping a Britain that it’s hard to believe any political parties really want”.
In his final report on the impact of austerity on human rights in the UK, Philip Alston, the UN rapporteur on extreme poverty, accused ministers of being in a state of denial about the impact of policies, including the rollout of universal credit, since 2010. He accused them of the “systematic immiseration of a significant part of the British population” and warned that worse could be yet to come for the most vulnerable, who face “a major adverse impact” if Brexit proceeds. He said leaving the EU was “a tragic distraction from the social and economic policies shaping a Britain that it’s hard to believe any political parties really want”.
The New York-based lawyer’s findings, published on Wednesday, follows a two-week fact-finding mission in November after which he angered ministers by calling child poverty in Britain “not just a disgrace but a social calamity and an economic disaster”. Now he has accused them of refusing to debate the issues he raised and instead deploying “window dressing to minimise political fallout” by insisting the country is enjoying record lows in absolute poverty, children in workless households and low unemployment.
The “endlessly repeated” mantra about rising employment overlooks that “close to 40% of children are predicted to be living in poverty two years from now, 16% of people over 65 live in relative poverty and millions of those who are in work are dependent upon various forms of charity to cope”, he said.
Amber Rudd, the work and pensions secretary, said in November she was “disappointed to say the least by the extraordinary political nature” of Alston’s language after his tour of places including Newcastle, Glasgow, Belfast, Cardiff, Jaywick and London. Alston replied in his 21-page final report that there was an “almost complete disconnect” between what ministers and the public saw. The impact of austerity was obvious to anyone who opened their eyes, he said.
In his most barbed swipe at Rudd and her predecessors in charge of welfare, he said: “It might seem to some observers that the department of work and pensions has been tasked with designing a digital and sanitised version of the 19th-century workhouse, made infamous by Charles Dickens.”
He said he had met people who had sold sex for money and joined gangs to avoid destitution.
The government hit back calling Alston’s report “barely believable”.
“The UN’s own data shows the UK is one of the happiest places in the world to live, and other countries have come here to find out more about how we support people to improve their lives,” a spokesperson for the Department for Work and Pensions said.
“Therefore this is a barely believable documentation of Britain, based on a tiny period of time spent here. It paints a completely inaccurate picture of our approach to tackling poverty.”
Alston will present his report to the UN Human Rights Council in Geneva next month and will argue that successive Conservative-led governments persisted with austerity and welfare cuts amid high levels of employment and a growing economy despite evidence that large-scale poverty was persisting. In doing so, “much of the glue that has held British society together since the second world war has been deliberately removed and replaced with a harsh and uncaring ethos ... British compassion has been replaced by a punitive, mean-spirited and often callous approach apparently designed to impose a rigid order on the lives of those least capable of coping.”
The report slams the government’s austerity programme, with criticisms of “shocking” rises in the use of food banks and rough sleeping, falling life expectancy for some, the “decimation” of legal aid, the denial of benefits to the severely disabled, falling teachers’ salaries in real terms and the impoverishment of single mothers and people with mental illness.
Alston said austerity had “deliberately gutted” local authorities, shrinking library, youth, police and park services to the extent that it was not surprising there were “unheard-of levels of loneliness and isolation”.
There was some praise for ministers for increases in work allowances under the universal credit welfare system and supporting the national minimum wage, but Alston said these measures had had not stopped the “dramatic decline in the fortunes of the least well-off”.
He recommended ministers reverse local government funding cuts, scrap the benefits cap, eliminate the five-week delay in receiving initial universal credit benefits and rethink the privatisation of services including rural transport.
“Thomas Hobbes observed long ago, such an approach condemns the least well-off to lives that are ‘solitary, poor, nasty, brutish, and short’,” he said. “As the British social contract slowly evaporates, Hobbes’ prediction risks becoming the new reality.”
The Congress Party needs to die
Yogendra Yadav in The Indian Express
My remark on a TV show, that the “Congress must die”, has triggered a debate, perhaps somewhat prematurely, on the role of the country’s principal Opposition party in the times to come. Some of the early reactions have been virulent. Perhaps the timing of the remark made it look like an attempt to kick someone when he is down. And the metaphor of death invited strong emotional reaction.
Let me, therefore, spell out the rationale in the hope that it would generate a more serious and constructive debate. Let me begin by clarifying what this remark was not. One, it was not a knee-jerk emotional outburst in reaction to an exit poll. I had expressed a similar opinion earlier too. The broad judgment is not dependent on the exit polls, unless, of course, the Congress manages to defeat the BJP in the states where it is a direct Congress-BJP contest. Two, I harbour no animus or khundak against Congress leaders. I have said publicly that Rahul Gandhi is more sincere than most political leaders that I have met and far more intelligent than everyone thinks.
----- Also Read
Opinion | Suhas Palshikar writes: Dear Yogendra, I disagree
----
Three, this is not a forecast. I know big political parties don’t die easily, and not just because they lose two elections. I don’t have Pragya Thakur’s powers to give shrapa (curse), so you may call it my wish. Finally, this wish is not born out of a congenital anti-Congressism. I have always maintained that Ram Manohar Lohia’s anti-Congressism was a short-term political tactic and must not be turned into an ideology. Unlike most Lohiaites, I have come to admire the role of Nehru and the Congress party in nation-building in the first two decades after Independence.
To my mind, the core issue is assessing the Congress’ potential in acting as a bulwark against the onslaught on the foundations of our republic. There are two assumptions here. One, the rise of the Narendra Modi-led BJP presents a threat to the core constitutional values of democracy and diversity. Two, as the principal national Opposition party, the Congress carries the first charge of protecting the republic against this onslaught.
Once we agree on these, and I think most of my critics would share these assumptions, then we can enter into a meaningful debate and disagreement on the following questions: Has the Congress done justice to this historical responsibility in the last five years? Or, can it be trusted to perform this responsibility in the foreseeable future? My answer is a clear no. The Congress is not just not up to this task, it is a hurdle for those who wish to do so.
Let us look at what the Congress did, or rather didn’t, in the last five years. The Modi regime’s economic performance was below average. Did the Congress organise any nation-wide mass movement to articulate and mobilise the farmers’ distress, or the rising unemployment among the youth, or the small traders’ anger against the way the GST was being implemented, not to speak of the disaster of demonetisation? These five years were marked by a spate of lynching of Muslims and rising atrocities against Dalits. Did the Congress even articulate it coherently in a way that would make sense to non-Muslims and non-Dalits as well?
Or take this election, after the Congress got a dream launch-pad with victory in three assembly elections. Did the Congress do something in these three states that could be presented as an alternative to the Modi regime? Did the Congress have a message for the voters of this country? No doubt, it finally came out with a decent manifesto, but that is hardly a political message for the last person. Nor did it have a credible messenger. Pitted against Modi’s communicative onslaught, Rahul Gandhi carried little appeal. The Congress did not appear to have a strategy to handle the post-Pulwama “nationalist” blitz by the BJP. And it certainly had no roadmap for building a Mahagathbandhan: Just compare how the BJP brought back the Shiv Sena and the AGP with how the Congress dealt with alliances in UP, Bihar and Delhi.
I don’t overlook the odds the Congress was up against: The Modi government’s brazen misuse of state power, its mind-boggling money power and the near complete control over mainstream media. But did the Congress do what could be done under these constraints? Besides, the only reason why mainstream parties exist and flourish is their viability and reach. The Congress cannot say everyone must come to it because this is the only party that can take on the BJP and then give reasons why it couldn’t.
Let’s focus on the future. The prospects of a second Modi regime bring with it two deeper challenges to our republic. On the one hand, we are walking towards electoral authoritarianism where the electoral mandate will replace any constitutional constraints. On the other hand, there is a slide towards non-theocratic majoritarianism, where minorities are reduced to the status of second-rate citizens. Do we expect the Congress to be the principal force to combat these two dangers? To my mind, the Congress does not seem to possess the vision, the strategy or the ground strength to take on this historic responsibility. If so, the Congress is not the instrument needed to save the republic.
Worse, the Congress is an obstacle to those who want to build an alternative. A large mainstream party acts like a magnet that catches a lot of energy around it. So, even when the Congress is unable to defeat the BJP, it ends up diverting and diffusing a lot of the energy that gets drawn to it. It won’t do the job and won’t let anyone else do it. Alternative politics cannot take off until it calls the bluff of “Vote for Congress or else…”, unless it begins to carry on its work as if the Congress did not exist. This is how the metaphor of death should be understood.
Of course, parties don’t wither away or die an instant death. There are two ways in which the Congress can “die”. There is death by attrition, where a big party keeps getting marginalised and gradually loses traction with the voters. This process takes many elections, perhaps many decades. This is exactly what the BJP would wish for the Congress. But there is also death by submergence, where the remaining energy of the party gets subsumed in a new, larger coalition. There is still a lot of energy in the country to take on the challenge to our republic. The ideal “death” for the Congress would be for this energy, inside and outside the Congress, to merge into a new alternative.
The dark metaphor of death is an invitation to think about a new birth. Or a rebirth?
My remark on a TV show, that the “Congress must die”, has triggered a debate, perhaps somewhat prematurely, on the role of the country’s principal Opposition party in the times to come. Some of the early reactions have been virulent. Perhaps the timing of the remark made it look like an attempt to kick someone when he is down. And the metaphor of death invited strong emotional reaction.
Let me, therefore, spell out the rationale in the hope that it would generate a more serious and constructive debate. Let me begin by clarifying what this remark was not. One, it was not a knee-jerk emotional outburst in reaction to an exit poll. I had expressed a similar opinion earlier too. The broad judgment is not dependent on the exit polls, unless, of course, the Congress manages to defeat the BJP in the states where it is a direct Congress-BJP contest. Two, I harbour no animus or khundak against Congress leaders. I have said publicly that Rahul Gandhi is more sincere than most political leaders that I have met and far more intelligent than everyone thinks.
----- Also Read
Opinion | Suhas Palshikar writes: Dear Yogendra, I disagree
----
Three, this is not a forecast. I know big political parties don’t die easily, and not just because they lose two elections. I don’t have Pragya Thakur’s powers to give shrapa (curse), so you may call it my wish. Finally, this wish is not born out of a congenital anti-Congressism. I have always maintained that Ram Manohar Lohia’s anti-Congressism was a short-term political tactic and must not be turned into an ideology. Unlike most Lohiaites, I have come to admire the role of Nehru and the Congress party in nation-building in the first two decades after Independence.
To my mind, the core issue is assessing the Congress’ potential in acting as a bulwark against the onslaught on the foundations of our republic. There are two assumptions here. One, the rise of the Narendra Modi-led BJP presents a threat to the core constitutional values of democracy and diversity. Two, as the principal national Opposition party, the Congress carries the first charge of protecting the republic against this onslaught.
Once we agree on these, and I think most of my critics would share these assumptions, then we can enter into a meaningful debate and disagreement on the following questions: Has the Congress done justice to this historical responsibility in the last five years? Or, can it be trusted to perform this responsibility in the foreseeable future? My answer is a clear no. The Congress is not just not up to this task, it is a hurdle for those who wish to do so.
Let us look at what the Congress did, or rather didn’t, in the last five years. The Modi regime’s economic performance was below average. Did the Congress organise any nation-wide mass movement to articulate and mobilise the farmers’ distress, or the rising unemployment among the youth, or the small traders’ anger against the way the GST was being implemented, not to speak of the disaster of demonetisation? These five years were marked by a spate of lynching of Muslims and rising atrocities against Dalits. Did the Congress even articulate it coherently in a way that would make sense to non-Muslims and non-Dalits as well?
Or take this election, after the Congress got a dream launch-pad with victory in three assembly elections. Did the Congress do something in these three states that could be presented as an alternative to the Modi regime? Did the Congress have a message for the voters of this country? No doubt, it finally came out with a decent manifesto, but that is hardly a political message for the last person. Nor did it have a credible messenger. Pitted against Modi’s communicative onslaught, Rahul Gandhi carried little appeal. The Congress did not appear to have a strategy to handle the post-Pulwama “nationalist” blitz by the BJP. And it certainly had no roadmap for building a Mahagathbandhan: Just compare how the BJP brought back the Shiv Sena and the AGP with how the Congress dealt with alliances in UP, Bihar and Delhi.
I don’t overlook the odds the Congress was up against: The Modi government’s brazen misuse of state power, its mind-boggling money power and the near complete control over mainstream media. But did the Congress do what could be done under these constraints? Besides, the only reason why mainstream parties exist and flourish is their viability and reach. The Congress cannot say everyone must come to it because this is the only party that can take on the BJP and then give reasons why it couldn’t.
Let’s focus on the future. The prospects of a second Modi regime bring with it two deeper challenges to our republic. On the one hand, we are walking towards electoral authoritarianism where the electoral mandate will replace any constitutional constraints. On the other hand, there is a slide towards non-theocratic majoritarianism, where minorities are reduced to the status of second-rate citizens. Do we expect the Congress to be the principal force to combat these two dangers? To my mind, the Congress does not seem to possess the vision, the strategy or the ground strength to take on this historic responsibility. If so, the Congress is not the instrument needed to save the republic.
Worse, the Congress is an obstacle to those who want to build an alternative. A large mainstream party acts like a magnet that catches a lot of energy around it. So, even when the Congress is unable to defeat the BJP, it ends up diverting and diffusing a lot of the energy that gets drawn to it. It won’t do the job and won’t let anyone else do it. Alternative politics cannot take off until it calls the bluff of “Vote for Congress or else…”, unless it begins to carry on its work as if the Congress did not exist. This is how the metaphor of death should be understood.
Of course, parties don’t wither away or die an instant death. There are two ways in which the Congress can “die”. There is death by attrition, where a big party keeps getting marginalised and gradually loses traction with the voters. This process takes many elections, perhaps many decades. This is exactly what the BJP would wish for the Congress. But there is also death by submergence, where the remaining energy of the party gets subsumed in a new, larger coalition. There is still a lot of energy in the country to take on the challenge to our republic. The ideal “death” for the Congress would be for this energy, inside and outside the Congress, to merge into a new alternative.
The dark metaphor of death is an invitation to think about a new birth. Or a rebirth?
Monday, 20 May 2019
Saturday, 18 May 2019
Pakistan, IMF and the Small Print
Najam Sethi in The Friday Times
Finally, after flip-flopping for nine months, the PTI government has signed on the dotted line with the IMF. It has also revived the PMLN’s tax amnesty scheme that it once lambasted as “a national security threat”. In the bargain, it has ditched the finance minister, Asad Umar, and the Governor of the State Bank of Pakistan, Tariq Bajwa. Both gentlemen seemed to be overly concerned about protecting Pakistan’s interests, while their boss, Prime Minister Imran Khan, was ready to throw in the towel. Peeved, Mr Umar is threatening to reveal details of his disenchantment with the IMF.
To be honest, though, there’s no point in haggling when you don’t have a leg to stand on. Without the IMF’s financial assistance, we will default on our external payments and be declared bankrupt. Without an extra injection of funds from the Tax Amnesty Scheme, we will have to cut back on defense or development expenditures, which we can ill-afford.
The “deal” with the IMF is subject to certain tough conditions. First, we must get the green light from FATF. As we speak, Pakistani officials are negotiating compliance before the Asia Pacific Group of FATF chaired by India. A lot of homework has been done. But this will be an on-going review process. If there are terrorist attacks in India whose footprints can be traced to Pakistan, the FATF file on Pakistan will be opened again.
Second, the IMF wants Pakistan to roll over its debts to China, Saudi Arabia and the UAE so that the burden of debt payments can be staggered over time. So Prime Minister Khan will have to pick up the begging bowl and grovel in faraway capitals all over again.
Third, the provinces will have to be pressured to accept a cut in their constitutional share of federal revenues so that IMF targets of the primary deficit can be met. While PTI governments in three provinces may be expected to roll over and play dead, Sindh will scream. But NAB can be leveraged to silence it.
Fourth, the IMF wants to “facilitate trade”. This will mean an end to export subsidies and restraint on increasing import duties. In other words, trading volumes will be determined exclusively by the exchange rate.
Fifth, the exchange rate will float freely so that the SBP doesn’t deplete its reserves by selling forex in the market in order to prop up the rupee. In other words, there will be continuing devaluation and rising inflation.
Sixth, the IMF wants to encourage spending on development and poverty alleviation. With given debt payments, that will lead to pressure on defense expenditures. Can we expect the brass to receive this with equanimity?
Last, but most important, it is an established fact that Washington leverages the IMF, World Back, Asian Development Bank and other international financial institutions through the US Treasury to achieve its foreign policy goals. Should Pakistan fail to deliver on US objectives in Afghanistan and India – a difficult task – we may expect these institutions to get tougher on future installments of funds.
The PTI Tax Amnesty Scheme is not dissimilar to the PMLN scheme that fetched less than Rs 100 Billion. But with the economy headed into a deeper trough, even that amount seems far-fetched. Some wisdom has therefore prevailed in allowing tax payable to be determined in the next six weeks but payment made over the course of the next twelve months, albeit with some surcharge.
But, like the PMLN scheme, the PTI scheme suffers from one major defect. It excludes “holders of public office” in the last twenty years. Why twenty years? Why not the last five or last thirty? What is the objective criterion for this cut-off date? Then there’s the definition of public office. It is all encompassing, spanning full three pages of an Ordinance. It includes everyone from the President of Pakistan at the top to Tehsil Nazims at the bottom, including paid private sector executives, advisors, consultants, etc., of statutory organisations or institutions or organisations in the control of the government of Pakistan. In other words, it excludes tens of thousands of officials and “public” representatives who are amongst the most corrupt in the country. This is the cream of the elite that has captured the state. This is the elite against whom we all love to rail. But what is good for the goose is not good for the gander. It seems that the bowels of the state of Pakistan are not to be cleansed after all.
The Tax Amnesty Scheme was nine months in the making. If the PMLN scheme had been extended when the PTI government took over, there would have been a lot of money in the coffers today. In the event, it took half a day to be promulgated via a Presidential Ordinance after proroguing the National Assembly so that it couldn’t be debated.
The small print in the IMF Agreement and Tax Amnesty Scheme testifies to the incompetence of the PTI regime in the face of rising national security challenges to the state of Pakistan. The forecast is grim.
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